[The Turning Point] How Ratan Tata-backed Moglix was born out of an idea to be the next Alibaba
Turning Point is a series of short articles that focusses on the moment when an entrepreneur hit upon their winning idea. Today, we look at Noida-based Moglix, a B2B ecommerce platform that aims to digitally transform the supply chain of the manufacturing sector in India.
IIT Kanpur and ISB alumnus Rahul Garg was heading AdX (India SEA and Korea) at Google in 2014 when the idea of an ‘Alibaba 2.0’ hit him.
Always willing to take the entrepreneurial plunge, Rahul was having a conversation with a colleague about his decision to shift from Japan to Singapore. “I knew I had to do it, or else I would regret it for the rest of my life,” said Rahul’s colleague.
This one conversation stuck in his mind. “I was thinking about entrepreneurship for a while, but that moment was like pulling the trigger,” says 40-year-old Rahul.
He decided to put down his papers the very next day to “move on and crystallise”.
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While Rahul was excited about two to three areas, his ideas were still vague. Having worked in the advertisement space, Rahul had closely observed the B2B commerce space. “Advertising was basically a means of building more business opportunities in my mind,” he says.
Excited about pursuing opportunities in the ecommerce space, he envisioned building an Alibaba 2.0. “By then, most of the companies were starting to move from classified to transaction platform, and my idea was that similar trends would follow in the B2B space as well. There was a huge opportunity,” he says.
This led to the birth of Moglix in January 2015. The startup specialises in B2B procurement, maintenance, repair and overhaul of industrial products such as fasteners and industrial electricals.
Faridabad-based Rahul decided to move to Delhi to start the venture. While he was initially confused between Gurugram and Noida, Rahul finally chose the latter as his base. His family friend had a welding and manufacturing plant in Noida and Rahul set up his office there.
“There was no overthinking behind this. I knew I would be focusing on the manufacturing sector and disrupting distribution. Technology impact in the distribution segment was going to be massive,” he says.
Soon, Moglix was backed by Accel Partners and Jungle Ventures. In fact, industrialist and Tata Sons Chairman Emeritus Ratan Tata came on board as an investor in the seed round itself.
Over the years, after many funding rounds, the B2B ecommerce marketplace has managed to close its Series D round of funding. It is also backed by marquee investors including Tiger Global, Sequoia India, Composite Capital, IFC, Venture Highway.
In FY 2018, Moglix recorded 120x growth in revenue, and in March 2019, it announced that it had on-bordered Flipkart CEO Kalyan Krishnamurthy as an investor in his personal capacity.
With an aim to digitally transform the supply chain of the manufacturing sector in India, Moglix now plans to create industrial centres across the country to cover all 25 plus major hubs of manufacturing by May this year.
Moglix is also starting an innovation garage called “Moglix Innovation Hub (MIH)” for B2B commerce and supply chain. This initiative will focus on areas pertinent to the procurement domain - advance technology, SaaS platforms, fintech, and logistics to name a few.
Moglix will continue to invest in young and dynamic EIRs (entrepreneurs in residence) to execute these ideas. A sum of $5 million has also been set aside for MIH.
“Manufacturing is not the most-sexy sector, and with the GST (Goods and Service Tax) coming in, there was a significant shift in terms of how companies would have to think about the elements of supply chain. It was a good boost for us,” Rahul says.
(Edited by Megha Reddy)
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